COVID-19: Support for Small Businesses

Posted on 25 March, 2020

It is our belief that in turbulent times, small business owners must band together to endure and survive. We have compiled this list of business-related resources that have been put together in response to COVID-19, and will continue to update the list as we receive more information.

COVID-19: Support for Entrepreneurs

Federal Government - Resources for Canadian businesses

March 27 Update: The federal government increases the temporary wage subsidy and introduces a new loan program for small businesses

Highlights:

  • Parliamentary Budget Officer Yves Giroux released a forecast report based on the possibility of physical distancing lasting until August. This report predicted a jump in the national unemployment rate to 15 percent by the end of 2020.
  • In response to this new information, the temporary wage subsidy previously announced by the federal government last week has increased from 10 percent to 75 percent.
  • The government is also introducing a new Canada Emergency Business Account, which will provide loans of up to $40,000 for small-medium sized businesses. These loans will be interest-free for one year.
  • More information on these new measures will be available on Monday, March 30.

March 25 Update:

Previous Highlights:

  • Additional $300 billion lending capacity by major banks
  • Business Credit Availability Program through Export Development Canada (EDC) and the Business Development Bank of Canada (BDC)
  • Tax payment deferral until August 31, 2020
  • 10 percent wage subsidy for small businesses for the next 90 days (maximum of $1,375 per employee or $25,000 per employer) 
  • Increased credit for the agriculture sector through Farm Credit Canada

 Government of Alberta - Support for Employers

Highlights:

  • Deferred payments until August 31, 2020 on corporate income tax
  • Natural gas and electricity payments for small commercial and farm customers can be deferred for up to 90 days (you must call your provider directly to arrange this)

ATB Relief for Small Business Customers

Highlights:

  • Payments for loans and lines of credit can be deferred for up to 6 months
  • Small businesses can apply for additional working capital during this time

 BDC Relief Measures

Highlights:

  • Working capital loans of up to $2 million for qualifying businesses:
    • Exclusions include: start-ups, refinancing, and change of ownership
    • Terms and conditions: 12 months postponement, maximum repayment of 36 months
  • For BDC clients with a total loan commitment of $1 million or less:
    • Payment deferral for up to 6 months, free of charge
  • For new loans:
    • Reduced rates based on eligibility

Documentation requirements for working capital loans

Due to high volumes, BDC is requesting that you assemble the following into one complete package and forward it as an email, or upload it through their Client Space Portal:

  • Most recent three years of year end financial statements (if BDC has those on file already, please indicate accordingly)
  • Most recent year to date financials (Balance Sheet, comparable income statement to last year, aged A/R and aged A/P listing)
  • Sales and Cashflow projections for the next two years
  • Attached Loan Application Form (can be requested through your account manager)
  • Attached Personal Net Worth Form (can also be requested through your account manager)
  • Organizational Chart showing the ownership of all companies
  • Overview of costs within the next few months (see questions below that help to answer that question)
  • ID verification*
  • Site visit - note from BDCto keep everyone safe (yourselves, your families and (y)our employees) we found creative ways to collect/conduct those steps differently. More information to be provided by Account Manager.

Additional question requirements from BDC

  1. At what activity level do you anticipate to operate at, over the next six months (i.e. full shut down or reduced capacity)? Examples:
    • What are the main impacts on your activities?
    • Complete or partial closure of your premises?
    • Specialized staff / employees required?
    • Access to premises: common workspace (number of employees) or remote work possible?
  2. What are the key carrying costs (burn rate) for the next 6 months? Examples:
    • Rent, insurance, electricity, salaries, financial fees, etc.
  3. With a working capital loan and/or postponement (and support from other lenders) does this cover your cash needs for the next six months? Examples:
    • Cash and availability on your current bank line of credit?
    • Do you have other sources of funding available?
    • Personal ability to inject funds in addition to BDC loan?
  4. What are your agreements with key suppliers (and customers) on payment terms / support for the next six months? Examples:
    • Have you undertaken discussions / negotiations with third parties?
    • Do you have line-of-sight to required raw materials for the next six months?

BDC Contact Information: 1-877-232-2269


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